Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Zenith Energy: PEP Cuts In OPTrust and ICG

Zenith Energy's Offer From Pacific Equity

QIC's Move After OPTrust Counters For Pacific Energy

Quiddity Advisors

Event-Driven

<div>
<p>On the 6 March, remote power generator <a href="https://www.smartkarma.com/entities/zenith-energy-ltd-au" target="_blank" data-smartkarma-citation="entities:28909:1" rel="noopener">Zenith Energy Ltd (ZEN AU)</a> specialist <a href="https://www.asx.com.au/asxpdf/20200309/pdf/44fvh5v758zx28.pdf" target="_blank" rel="noopener">announced</a> an Offer, by way of a Scheme, from Elemental Infrastructure BidCo, a Pacific Equity Partners (PEP) entity, at $1.01/share in cash, a 45.3% premium to last close.  Since then:</p>
<h2>A Summary of Recent Events</h2>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 142.56px;">Date</td>
<td style="width: 560.972px;">Data in the Date</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200408/pdf/44gtw6vy8zrj83.pdf" target="_blank" rel="noopener">6-Apr-20</a></td>
<td style="width: 560.972px;">An initial substantial shareholder announcement (15.45%) was made by Apex Opportunities, an entity controlled by Infrastructure Specialist Asset Management, a trustee of Diversified Infrastructure Trust/Infrastructure Capital Group (ICG) and OPSEU Pension Plant Trust Fund (OPTrust). </td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200407/pdf/44gsn1lqnfr10z.pdf" target="_blank" rel="noopener">7-Apr-20</a></td>
<td style="width: 560.972px;">Zenith <a href="https://www.asx.com.au/asxpdf/20200407/pdf/44gsn1lqnfr10z.pdf" target="_blank" rel="noopener">announced</a> the Board intended to pay a A$0.13/share fully franked dividend, as part of the A$1.01 Scheme consideration. The special dividend was expected to be paid with an anticipated record date of the 23 June. </td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200424/pdf/44h799wqzgn8lr.pdf" target="_blank" rel="noopener">22-Apr-20</a></td>
<td style="width: 560.972px;">Apex stake was bumped to <a href="https://www.asx.com.au/asxpdf/20200424/pdf/44h799wqzgn8lr.pdf" target="_blank" rel="noopener">17.61%</a>.</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200428/pdf/44hb6qsxw488xv.pdf" target="_blank" rel="noopener">28-Apr-20</a></td>
<td style="width: 560.972px;">A "business as usual" update, despite COVID-19.</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200507/pdf/44hmgsvtkc4jsc.pdf" target="_blank" rel="noopener">6-May-20</a></td>
<td style="width: 560.972px;">PEP noted Apex's holding, and that it would be challenging to implement the Scheme if Apex were to vote against the resolutions. PEP reached out to Apex such that Apex's consortium members could take an equity position in the Elemental/PEP group holding structure.</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200601/pdf/44j86mj994khxw.pdf" target="_blank" rel="noopener">29-May-20</a></td>
<td style="width: 560.972px;">Zenith announced Apex had joined PEP/Elemental's proposed Scheme. There was no other material changes to the Scheme implementation deed announced on the 6 March.</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200602/pdf/44jb7hyglg70p7.pdf" target="_blank" rel="noopener">2-Jun-20</a></td>
<td style="width: 560.972px;">Westoz bumps stake to 10.04% from 8.91%</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200605/pdf/44jfhtm2nyywvc.pdf" target="_blank" rel="noopener">5-Jun-20</a></td>
<td style="width: 560.972px;">Westoz bumps stake to 11.90% from 10.04%</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200625/pdf/44jyfp89sygyzx.pdf" target="_blank" rel="noopener">25-Jun-20</a></td>
<td style="width: 560.972px;">Court orders the convening of the Scheme meetings, to be held on the 31 July.</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200625/pdf/44jys24h9k8kgp.pdf" target="_blank" rel="noopener">25-Jun-20</a></td>
<td style="width: 560.972px;">Scheme booklet registered with ASIC</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200702/pdf/44k5v0g0tq4tpq.pdf" target="_blank" rel="noopener">2-Jul-20</a></td>
<td style="width: 560.972px;">Westoz bumps stake to 12.94% from 11.90%</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200713/pdf/44kggdwy2lycw6.pdf" target="_blank" rel="noopener">13-Jul-20</a></td>
<td style="width: 560.972px;">
<p>"<em>Early-stage submissions in relation to the Scheme indicate a risk .... the Scheme may not be passed</em>". The <a href="https://www.asx.com.au/asxpdf/20200713/pdf/44kggdwy2lycw6.pdf" target="_blank" rel="noopener">announcement</a> mentions a substantial shareholder, together with a number of minor shareholders, holding 19.59mn Zenith shares, or 22.25% of shares out, will vote against the Scheme. One of the dissenting shareholders is believed to be Westoz.</p>
</td>
</tr>
<tr>
<td style="width: 142.56px;"><a href="https://www.asx.com.au/asxpdf/20200714/pdf/44kjbz6p1r336t.pdf" target="_blank" rel="noopener">14-Jul-20</a></td>
<td style="width: 560.972px;">
<p>FIRB approves Scheme</p>
</td>
</tr>
</tbody>
</table>
</div>
<div class="content-caption">
<p style="text-align: left;">Source: ASX</p>
</div>
<h2>The New News</h2>
<p style="text-align: left;">This morning Elemental Infrastructure <a href="https://www.asx.com.au/asxpdf/20200721/pdf/44kq024jw0tmjj.pdf" target="_blank" rel="noopener">increased</a> the cash price to A$1.05/share from $1.01/share. The Offer is now best and final - provided no competing proposal emerges.</p>
<ul>
<li>The Scheme Consideration will include a fully franked special dividend of A$00.14/share. </li>
<li>More importantly, Westoz said it would vote in favour of the Scheme.  Shareholders have until the 29 July to submit their proxies or to change any exiting proxy.</li>
<li>The revised Offer price is a 51.1% premium to the undisturbed price and above the independent experts' range of A$0.89-A$1.02. </li>
</ul>
<p>This deal is done. Given the benefits of the franking credits to those shareholders who can take advantage, this is trading tight to terms.</p>


On the 6 March, remote power generator Zenith Energy Ltd (ZEN AU) specialist announced an Offer, by way of a Scheme, from Elemental Infrastructure BidCo, a Pacific Equity Partners (PEP) entity, at $1.01/share in cash, a 45.3% premium to last close.  Since then:
A Summary of Recent Events



Date
Data in the Date


6-Apr-20
An initial substantial shareholder announcement (15.45%) was made by Apex Opportunities, an entity controlled by Infrastructure Specialist Asset Management, a trustee of Diversified Infrastructure Trust/Infrastructure Capital Group (ICG) and OPSEU Pension Plant Trust Fund (OPTrust). 


7-Apr-20
Zenith announced the Board intended to pay a A$0.13/share fully franked dividend, as part of the A$1.01 Scheme consideration. The special dividend was expected to be paid with an anticipated record date of the 23 June. 


22-Apr-20
Apex stake was bumped to 17.61%.


28-Apr-20
A "business as usual" update, despite COVID-19.


6-May-20
PEP noted Apex's holding, and that it would be challenging to implement the Scheme if Apex were to vote against the resolutions. PEP reached out to Apex such that Apex's consortium members could take an equity position in the Elemental/PEP group holding structure.


29-May-20
Zenith announced Apex had joined PEP/Elemental's proposed Scheme. There was no other material changes to the Scheme implementation deed announced on the 6 March.


2-Jun-20
Westoz bumps stake to 10.04% from 8.91%


5-Jun-20
Westoz bumps stake to 11.90% from 10.04%


25-Jun-20
Court orders the convening of the Scheme meetings, to be held on the 31 July.


25-Jun-20
Scheme booklet registered with ASIC


2-Jul-20
Westoz bumps stake to 12.94% from 11.90%


13-Jul-20

"Early-stage submissions in relation to the Scheme indicate a risk .... the Scheme may not be passed". The announcement mentions a substantial shareholder, together with a number of minor shareholders, holding 19.59mn Zenith shares, or 22.25% of shares out, will vote against the Scheme. One of the dissenting shareholders is believed to be Westoz.



14-Jul-20

FIRB approves Scheme






Source: ASX

The New News
This morning Elemental Infrastructure increased the cash price to A$1.05/share from $1.01/share. The Offer is now best and final - provided no competing proposal emerges.

The Scheme Consideration will include a fully franked special dividend of A$00.14/share. 
More importantly, Westoz said it would vote in favour of the Scheme.  Shareholders have until the 29 July to submit their proxies or to change any exiting proxy.
The revised Offer price is a 51.1% premium to the undisturbed price and above the independent experts' range of A$0.89-A$1.02. 

This deal is done. Given the benefits of the franking credits to those shareholders who can take advantage, this is trading tight to terms.

Zenith Energy Ltd/AU

Zenith Energy: Done Deal As PEP Bumps